Should You Think About Buying Yanlord Land Group Limited (SGX:Z25) Now?

Yanlord Land Group Limited (SGX:Z25), is not the largest company out there, but it led the SGX gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Yanlord Land Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out the opportunities and risks within the SG Real Estate industry.

What's The Opportunity In Yanlord Land Group?

According to my valuation model, Yanlord Land Group seems to be fairly priced at around 20% below my intrinsic value, which means if you buy Yanlord Land Group today, you’d be paying a fair price for it. And if you believe the company’s true value is SGD1.28, then there’s not much of an upside to gain from mispricing. Furthermore, Yanlord Land Group’s low beta implies that the stock is less volatile than the wider market.

What does the future of Yanlord Land Group look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Yanlord Land Group, it is expected to deliver a negative earnings growth of -17%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Z25 seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on Z25 for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on Z25 should the price fluctuate below its true value.

If you want to dive deeper into Yanlord Land Group, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for Yanlord Land Group (2 don't sit too well with us!) that we believe deserve your full attention.

If you are no longer interested in Yanlord Land Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.